Why Is Everyone Scared Of The New FTC Rules For Internet Marketers Starting Dec 1, 2009?

There is a thread over in the CPA section, advocating a "great out of the box" (not my words) method for making money which basically involves scamming people using Craigslist and a free trial offer.

I was more annoyed than usual since my 17 year old daughter, who was looking for a job on Craigslist, had come across this very scam and had shown it to me to ask my opinion.

Someone in that thread made the comment that after December 1, the method would violate the new FTC regulations.

The reality is that it has always been unethical and unlawful to engage in fraudulent and misleading advertising. Regulations make it a simpler task to enforce violations...the concepts of what constitutes fraud and deception makes for messier more expensive litigation. Specific regulations make the FTC's job a lot easier. You violate the rules...you lose...no excuses...your intent does not matter...honest mistakes...too bad, so sad. Of course the rules themselves can be open to interpretation...but it definitely provides the FTC with leverage.

It seems that some people are worrying too much, while others who should be worried don't get it.

While nobody can feel 100% safe from government scrutiny which can be random to a degree, the reality is that the catalyst for the new regulations: widespread fraud and consumer complaints will be the same thing controlling where enforcement is concentrated.

If you are involved in promoting offers or products that are most likely to result in consumer complaints and that rely on deception to increase sales, you are far more likely to get caught up in FTC enforcement than if you are selling products that are not controversial and where the vendors offer refunds and good customer service.

The FTC has limited resources. They will not likely be randomly checking websites promoting products that nobody has ever complained about. There is enough actual fraud and consumer complaints to keep the FTC busy without having to hunt down marketers with nothing but satisfied customers. They will be wherever consumers are complaining the loudest and looking for the deepest pockets (but if you have any connection regardless of your personal pockets, you need to be concerned).

Ironically, the downside for ethical marketers who are now forced to comply with the new regulations which go beyond prohibiting outright fraud and deceit...is that it is highly unlikely that the true scammers will change the way they do business. I could be wrong, but I highly doubt that we have seen the end of FLOGS or totally fake testimonials. So legitimate marketers will be competing for the attention of consumers against the biggest consumer fraud offenders but with a much smaller arsenal of permitted marketing tactics.

There will likely be some toning down on "network provided" landing pages...since the networks will not want to risk getting into legal trouble, but many of the companies who use FLOGS and Fake News Sites will just be more careful about insulating their businesses to try to protect their assets. Their highly profitable business model is based upon fraud and deceit, and my guess is they will spend their time and money formulating ways to hide their assets and true identities rather than worrying about complying with FTC regulations.

Robyn

Thanks

As I said, I didn't say NOBODY was doing it...I'm saying, when I click on a sig link or visit reviews etc by people in this thread...the disclaimers that they have "no problem" with are nowhere to be found.

Would have been hard to find yours though because you don't advertise it

We have similar disclaimers in our TOS and such, but what I'm wondering is if it's only right to let people know that you might earn money from a recommendation, why don't people put it right in front of eye balls? Why not put it right next to the link if it's only "right" that people know?

I just think that a lot of the conversation is dominated by those that will say whatever they have to say to be on the "right" side of the issue....yet, their own sites don't exactly reflect what they claim is so "ethical" and "right".

CDarklord,

To you and I, yes common sense tells us that if we click a link that someone is going to make a commission.

But, do you think the average internet surfer knows? Because I had no clue that someone was making commission on me 2 years ago when I was clicking links from reviews to Amazon...

First of all, it's not a law. It's a guideline...and a vague one at that in many
areas.

I didn't say I wouldn't, at some point in time, modify the blogs that I have
that don't offer bonuses. I will, most likely, come up with bonuses for those
products as well. Let me tell you, it puts me head and shoulders above
every other affiliate out there so if anything, it will only increase my sales.

Will it take a little work?

Yeah, but so what?

It will give me something to do.

Point is, I'm still not concerned. And please don't compare me to a thief
because I don't appreciate it one bit.

Fair enough.

My first 2 years of affiliate marketing (2003 - 2004) I didn't offer any
kind of bonuses.

My conversion rate was about 2% and I made about $1,500 a month
from affiliate marketing.

In 2005, I gave it up and started to sell my own products as I saw that
as having more income potential.

In 2007, I started to get back into affiliate marketing, using a lot of
what I learned from writing sales copy (offering bonuses) and started to
apply that to selling affiliate products to see what effect it would have.

That year, my conversion increased to over 4% and I made over $4,000
a month just from selling affiliate products.

The numbers don't lie.

The more you give, the more you get in return.

No, a lot of affiliates who are flat broke, can just about afford to pay 10
cents per click for Adwords or $2 for an article and have absolutely
nothing to offer but their time (which actually is a great bonus) are
probably not going to do any better.

But Ron, isn't that the case with this business in general? Don't the ones
who go above and beyond make the most income?

My point is, those same people who you say are going to be affected by
the FTC ruling are making what, 2 or 3 sales a month...if that? We're
not talking about successful affiliates to begin with.

Those who ARE already successful will understand that they have to adapt
and if they do adapt, using the strategies that I have outlined, they will
not only continue to make sales but will actually make more sales in the
process.

And yes, I am actually willing to bet on that.

And let me clarify one other thing Jeremy.

Yes, the "guidelines" apply to everybody.

There is also what I call "reasonable application"

If you're selling something that can't possibly do anybody any harm and
don't disclose that you're an affiliate making a commission, the chances of...

1. A complaint
2. The FTC coming after you if there are enough complaints

Are slim to none. That doesn't mean you don't comply. That isn't what I
said. I don't condone purposely violating any regulation, even if it isn't a law.

I'm saying, and I still stand by this, don't get your knickers in a knot over
it because the FTC has bigger fish to fry...if they can even get those
people.

That is the reality.

So if John Doe happens to have 1000 blogs selling innocuous products that
nobody in their right mind would give a crap about, is it really worth all
his man hours to go through each one of them and update them to appease
a guideline that in all probability will never cross his path?

The fine, if he's fined, will probably be less money than the lost time he
took to change every single one of his blogs.

There comes a point where you have to be sensible about this whole thing.